THE COMBINED USE
OF BUSINESS MANAGEMENT WITH FACILITY MANAGEMENT AS AN OPTION FOR INTELLIGENT
BUILDING

Andreas Dittmar Weise

Universidade Federal de Santa Maria, Brazil

E-mail: mail@adweise.de

Charles Albino Schultz

Universidade Federal da Fronteira Sul, Brazil

E-mail: charles.alschultz@gmail.com

Andréa Cristina Trierweiller

Universidade Federal de Santa Catarina, Brazil

E-mail: andreatri@gmail.com

Rudimar Antunes da Rocha

Universidade Federal de Santa Catarina, Brazil

E-mail: rrudimar@hotmail.com

Blênio Cesar Severo Peixe

Universidade Federal de Santa Catarina, Brazil

E-mail: blenio@ufpr.br

Submission: 10/06/2013

Accept: 14/08/2013

ABSTRACT

Words like Business Management
(BM) and Facility Management (FM) are well known as separate management methods.
FM offers transparency about their property costs and exploitation, starting
from the planning phase until its demolition. The investor sees this in the
property invested capital and its recoverable yield. This means they also want
a profit with their real estates. Besides this, changes in the social and
environmental requirements become necessary to adapt the properties. The
solution is called Intelligent Building. Its primary aim is to collect and
select previous knowledge and information about Facility Management and
Business Management. It is an application, mainly with sight to characterize
and describe the possibilities of use of intelligent buildings as a combination
of Facility and Business Management. This paper is an indirect survey carried
out through a

documental procedure in the form
of a bibliographic research and theoretician study. Intelligent Building as
combination of FM and BM is new, but in our times necessary to satisfy the
needs of the demand. This type of building needs to be flexible in its
structure and services, open for changes in environmental requirements, e.g.
saving energy, and needs a lot of technology to realize their functions.
Consequently, it will be sustainable for a value enhancement. With a Computer
Aided Facilities Management system this is possible and the company will be
more flexible in relation to the competitors and future changes.

Words
like Business Management (BM) and Facility Management (FM) are well known as
separate management methods. Business Management searches for possibilities to
optimize main processes and better applications of existing products. But real
estates were being forgotten, which means they were not in the prospective
point of view for companies. On the balance sheet, real estates are a big part,
but to view them as a profit center is a relatively new thing. FM on the other
hand is looking for a better exploitation of the building and its related
services. A second function of Facility Management is the minimization of the
building costs. Over the whole life cycle of a property, FM wants to optimize
the processes in a building with functions like insourcing and outsourcing.

Intelligent
buildings are high-tech buildings, which means, they are collecting information
about the building and their processes into this building. These are also
flexible in their construction and open for changes. Flexible buildings are
created to correspond with the demand in question of structural needs and
exploitation.

A
combination of Facility Management and Business Management is new. Flexible
high-tech buildings are necessary to satisfy the demand, to increase the
productivity, optimize processes and finally, to increase the company profit.

2.METHODOLOGY

This
paper is an indirect survey carried out through a documental procedure in the
form of a bibliographic research and theoretician study (VERGARA, 2010). Its
primary aim is to collect and select previous knowledge and information about
Facility Management and Business Management. It is an application, mainly with
sight to characterize and describe (VERGARA, 2010) the possibilities of use of
intelligent buildings as a combination of Facility and Business Management.
Besides the primary objective, with this approach exclusively based on
information about FM and BM, new tendencies in the world-wide construction such
as intelligent buildings, are presented based on information of FM and
Business.

Furthermore,
this investigation is justified by the growing interest of investors and owners
of companies to know what a property really costs and where the biggest
operating costs are, once, according to newer studies, these new types of FM
conform buildings have higher returns on investment.

Finally,
as a limitation, the bibliographic exploration (VERGARA, 2010) results should
not be generalized for all combinations of BM and Facility Management once any
kind of FM actions mainly creates costs. Therefore, intelligent buildings may
be, on one hand, a good combination of FM and BM to create a higher property
and company value and on the other, to give sufficient flexible constructions
for future changes of exploitations.

3.FACILITY MANAGEMENT

Facility
Management is not new. The word itself has been used in decades. However, it
was only used in the context of dealing with building stocks. In the beginning
of this chapter the historical development and definition of FM will be
explained, continuing with economical situation, dimensions of Facility
Management and finally the service divisions of FM will be discussed.

3.1.Historical development and definition

The
term Facility Management, including Facilities Management (SCHULTE; PIERSCHKE,
2000), was used in the late 1970s and early 80s in the USA for the use phase of
construction/buildings. The 1st Conference on the impact of facilities on
productivity was held in 1978
in the USA, according to May (1998). Only five years
later, the Facility Management Institute defined the following concept:

“Facility Management is
the practice of coordinating the physical workplace with the people and work of
the organization, integrating the principles of business administration,
architecture, and the behavioral and engineering sciences.“ (LIBRARY OF
CONGRESS apud KAHLEN, 2001)

The
issues concerning workplace, people and work are now consolidated within the
concept of Facility Management (SCHULTE; PIERSCHKE, 2000). This definition is
also laid down by the International Facility Management Association (IFMA) in
“The IFMA Report # 1”
(IFMA, 1984). Based on this definition, many companies are trying to diversify
in FM, as the field of FM is very complex; the width of diverse applications
and the potential of the market are very high (MAY, 2004). In Brazil, the
research started only some years ago but the acceptance of FM in the market
exists until now.

3.2.Economic Situation

Currently,
companies are in the situation of rapidly evolving opportunities for data
processing. This allows the companies to integrate an information system for
all phases of the properties’ life cycle. Brazil is moving in the direction of
a service society. An environmental consciousness has become more important
(INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE, 2007). It demands to proceed
rationally with the resources, including, in particular, the saving of energy,
the optimal utilization of necessary resources in constructions and the reuse
of once necessary materials.

A
second challenge is that the market has become very dynamic. The needs of the
market participants are changing faster. This means that a property must be
more and more quickly constructed and needs to be more quickly at company’s
disposal if the company wants to remain competitive. This property also has to
suffice the diverse requirements because currently the removal rate of
companies has become very high. If it is inflexible, the results will be high
modification costs. The property also has to be managed effectively. A company
can no longer afford unnecessary costs.

These
are the major problems with which the companies rapidly grapple. In search of
innovative variations, the inefficiency of the building planning and management
was found. The companies are under strong competitive pressure. No company can
still afford to consider the cost of their property as given (HARDEN; KAHLEN,
1993). It has to try to minimize these costs. Here the new possibilities of
information that should help as well as data processing and comprehensive
analysis of enterprise data. Such an analysis will be possible by Facility
Management. It takes up with systems, which allows managers to make building
relevant decisions based on adequate information.

3.3.Dimensions of Facility Management

The
Facility Management needs to be effective in order to consider the entire life
cycle of a property. In addition, all possible real estate and user specific
information has to be collected and evaluated. Ultimately a holistic approach
of the FM is necessary to guarantee the efficient implementation of tasks and
attainment of FM targets (FRUTIG; REIBLICH, 1995).

From
today's perspective FM not only includes the use phase of the building, but
begins in project development and ends with the demolition of the property. In
the planning phase of a property it is possible to influence greatly the future
operational costs. In the actual use phase, this is only possible on a small
scale or by using a lot of capital. The demolition of a property poses as the
end of the FM. The opportunities to influence costs are pictured in Figure 1.

The
study of Helbling (2000) describes the situation as follows: “The operating and
maintenance costs exceed after around 7 years the final manufacturing costs,
that means that 85% of the total cost of a building accrues during use.”.

The
Facility Management needs to make decisions, and gather comprehensive and
accurate data about the property. The collection of information is one more
task of the FM. The collection of this information can exceed or blow the
budget.

Therefore
at the beginning of a FM project a very accurate differentiation between
absolutely necessary and not necessary data should follow. An inobservance
leads to much higher costs like Figure 2 points out. Furthermore, a permanent
inventory of data maintenance should follow, in order to maintain the status
and the quality of the future information. Nävy (2006) writes: “The objective
is a transparent company, in which all information about the material resources
and their management, organization and administration.” With this knowledge
remains the possibility to abridge the time of supply of the information. In
the case of an accident is a much faster reaction therefore possible.

Figure 2 – Increase in expenses and the cost of
details

Source: Braun, Osterle and Haller (2007)

The
collection of the respective information on material resources previously was
done in the various departments, so FM gathers these now into one
inter-divisional place (NÄVY, 2006). The integrality of the FM considers the
material resources not isolated from other processes, but as at the center of
the viewing and is shown in the following Figure 3.

Therefore,
FM is a holistic approach, which implies the view of periods, stages, functions
and object overlaps of the FM, to consequently meet the main task of the
process optimization (GRABATIN, 2002). Nävy (2006) also writes that due to the
complexity of the material resources, the great period of the life cycle and
importance of the potential cost is clear that the various tasks are much
differentiated within the FM.

Figure 3 – Areas of the Facility Management

Source: Nävy (2006, p. 4)

Nävy
(2006) leads the technical and the commercial point of view, to suffice the
holistic approach of the FM. Once the phase technically seen, it differs
between the technical, infrastructural and commercial buildings and space
management (HEß, 2002). Lutz and Klaproth (2004) integrate the space management
into the infrastructure building management. The commonly used term of the
building management limits the Facility Management on the exploitation phase.
To comply with the holistic view of the FM, the space management needs to be
seen as a single component. According to the author, a connection with the
infrastructural building management seems not very promising.

3.4.Service divisions of Facility Management

Services
of Facility Management are used for the protection of the core business and
thus secure the success of the company. They includes the areas of performance,
the management, the operation and services, according to Grabatin and
Feyerabend (2008). Administration is the commercial management. It contains
management responsibilities in all areas of a company, the administrative
agency, the marketing etc (NÄVY, 2006). Operating consists in the technical
management that includes the management of all technical systems, buildings and
lands. Offices are even supplementary services, and include mainly the domestic
economy and security areas (GONDRING; WAGNER VON VAHLEN, 2007).

4.THE COMPANY

4.1.Business - the core business of the company

Each
company has its central task – its core business. Due to the economic pressure,
to which it is increasingly exposed, it is concentrated on its own core
business. The basis for this is that the company first recognizes its business
and its corporate strategy in this direction is prepared to change, which of
course, mostly is incident with structural changes in the companies. This
disposition, however, the companies demonstrate the least possible. Brazilian
companies are not totally open for changes and innovations. They believe their
methods are still the best. Many companies may adapt badly, but a
reorganization of the administration allows the discharge (less work) of
personnel from the additional non-productive actions and a concentration for
the main tasks.

4.2.Company and its properties

Hens
(1999) says that companies need commercial real estate in the form of office
space, production halls, etc. In these properties, companies produce the
company's performance. Strategies will be conceived, product and marketing
approaches elaborated, and most important decisions will be reached. The
importance of the property unmistakably comes up. Nevertheless, a company
hardly ever has its real estate effectively managed (JÜRGENSONN; SCHÄFERS,
2004). The large amount of the costs that rose with the building are considered
necessary and unchangeably accepted. Why?

One
reason could be the decades of staying in the same national level of
competition. Within the Brazilian economy currently underlies a fundamental
change away from the market to the buyers’ market. The former national
competition situation exists now worldwide and sure both for the number of
competitors and the intensity of competition. (The former situation of national
competition now exists internationally, and in truth, affects both the number
of competitors as well as the intensity of the competition. Enterprises fight
for greater productivity in enhanced fields of competition. Companies and
investors want the best use of their assets. And the property now represents
the largest single item in assets, after the production and administrative
areas are rationalized.

It
is doubtful that the actual value of the current property assets corresponds to
the balance sheet (GERLACH; HIERONYMUS; SCHWATLO, 1994). It has for many years
worked for an improvement of the production processes, but is attached the
management of resources in such a low role that it could be neglected. After
investigations, in the USA only about 60 - 70% of the companies with just an
approximate knowledge about their property data and about 20% have no knowledge
(FALK, 1994). Overall, this means that only 10 - 20% of companies manage
effectively their real estate. According to IFMA (1984), study results
demonstrate for the clarification of the income statement that between 10 and
18% of annual expenses (total expenses in the income statement of the
companies) are in any way associated with buildings. This is even more obvious if
someone looks at the balance sheets. According to the balance of Harvard Real
Estate Inc. links between 25 and 50% of total assets are land and buildings.
This means that between a quarter and half of the total balance sheet of a
company concerns its real property, too much for one to simply accept this
costs.

The
interested parties in a property can be grouped into two categories. The
investor sees that in the property invested capital and its recoverable yield.
He is therefore interested to maintain the value of the building. The operators
and tenants wish to obtain profits with the property. Once the production
allows only a small increase, it orients to the building as a greater
potential.

Companies
want to analyze their properties of the benefits and will have, in relation to
their intensity of benefits, an unpleasant surprise. The intensity of benefits
of real estate is frightening low. An example of office space under
consideration of a 5 day work week with 8 hours per day and normal holidays, amounts
to the usual exploitation 20%, which means that the property has a capacity
utilization of 20% (FALK, 1994). In other words, this means with 220 working
days a year, each with 8 hours of work time, the building is empty 7000 hours
of a year from possible 8760 hours per year. This lack of capacity utilization
is questionable. Once a company has detected this, it has found a potential,
which is, for intensive management, the productivity of the company increase in
a significant degree.

The
current property portfolio that companies want is generalized and explained on
the example of the “Switzerland Building Park”. It has about 2.2 million
buildings (HOFER; WÜEST; PARTNER, 1995). A subdivision after usage demonstrates
that it includes more than 50% of residential buildings. These and agricultural
buildings, annex and large parts of the industrial and commercial buildings are
only relatively primitive structures of stone, wood and binders. Such buildings
are designated and known as static. A subdivision by age shows that more than
50% of the buildings were built before 1960 (OTT; KAUFMANN; JAKOB, 2004). In
other countries, this proportion is often even higher. Already a purely
technical point of view shows that at this time could then still not highly
technical building arise. (However, only through the pure technical point of
view it is demonstrated that buildings built during this time (before 1960)
cannot result in high technology buildings. These buildings are simple
structures, also known as static.

Considering
the two approaches together, a gross estimation over the current property
portfolio follows. Currently, one can consider as dynamic up to 10-15% of all
existing buildings, this meaning high-tech buildings. In other words, at least
85% of all buildings are quite normal and simple buildings. Looking on the
basis of these numbers in the future, one recognizes that our neither built
environment in the near future nor static buildings will be marked. For Brazil
there are no existing numbers. This means that the considerations of Facility
Management may occupy not only with new planned buildings. On the contrary,
there should be the objective, primarily of old buildings through Facility
Management to be adjusted to the needs of owners and users.

Most
companies view as the biggest expenditure for the property the final
manufacturing costs (HOMANN, 1999). All others are so insignificant that they
are together in a block of fixed costs to be considered. They do not remember
that every piece of useable floor area even day to day creates usage costs like
electricity, air conditioning and others. Such an approach is of course a cost
analysis that is not possible. The market analysis of an international company
says that within 8 years of follow-up costs already amount 5.5 times (HOMANN,
1999). Follow-up costs are divided into additional costs (heating, lighting,
electricity costs, etc.) and repairs (cabling, partition walls, double floors,
etc.) (WEISE; HORNBURG, 2007).

What
was initially demonstrated succumbs great changes to the Brazilian economy
Companies are coming in stronger competition. This will have higher
requirements, which they solve with a view of performance enhancement.
Companies need, more than ever before, respect on the efficiency of all of its parts.
Minimizing costs is the challenge. Otherwise, they cannot stand the competition
today on the new international markets. The rise in recent years, in
development of data processing and technology (particularly for construction
and space) must be integrated, if possible. The realization of the companies’
mission to orient only at the manufacturing sector is not enough. There will be
requiring always more services. Such are rendering almost exclusively in
commercial properties, which means that also the building must be optimally
managed (NÄVY, 2006).

Particularly
through strong training of the service sector, more people will always work in
offices. In order to be able to explore their productivity (the people who work
in the offices) it is necessary to create optimum working conditions for them.
Currently, the workers themselves demand even more. The money alone plays for
them no longer the only role. |They spend about 60% of their day at work and
therefore must be motivated (HELLERFORTH, 2008). They call for a “kind of world
experience on workplace”.

Stronger
environmental consciousness of people also shapes the enterprise sector (WEISE,
2007). Current intensification of legal rules for the environmental operation
of buildings must be absorbed by companies. Optimal use and re-use options of
more valuable resources is required. Especially for scarce resources like oil
one should to try switching to other opportunities. The prevention of pollution
by minimizing pollutant emissions must be respected (INTERGOVERNMENTAL PANEL ON
CLIMATE CHANGE, 2007).

Companies
need to manage effectively their property. They must keep in mind, however, the
above-mentioned aspects. Especially for the cost of a property, it is therefore
important, to be able to predict the
thinking and be assured from the beginning of the planning, because the costs
first may be higher or perhaps at new building/reconstruction (HELLERFORTH,
2008).

5.THE “INTELLIGENT BUILDING”

Due
to the ever-increasing international competition and the necessity of
integration of growing economical, environmental and social aspects in the
individual phases of the entire life cycle of real estate the “intelligent
building” was developed as an alternative test of solving the difficulties
faced by the companies.

5.1.Term: “intelligent building”

Intelligent
buildings are also an attempt to meet all demands by the company using the
latest high-tech and data-processing opportunities (LAZAK, 1994). In order for
a permanent exchange of information to occur between the groups (which are in
the building), all data must be systematically collected and handled by a
computer, so at the end an “intelligent building” may be developed.

This
indicates that the integration of data-processing techniques is a basic
requirement and must be assured from the beginning of the planning (KIM, 2008).
It has been recognized that the availability of information decreases very
quickly in accordance with existing methods of commissioning, so that in the
use phase much data needs to be recorded again. Then again, the costs increase,
what belies the economic requirements.

Booty
(2006) defines that “… an intelligent building provides a productive and
cost-effective environment because its four basic components – structure,
systems, services and management – have fully integrated, creating the optimum
design”.

Intelligence
is a function of flexibility and adaptability to the changing needs of the
permanent business establishment. The need for change results from the changing
needs of the users of the property, the environment and the society. This will
be achieved through flexible concepts, integrated building automation,
networked information and communications technology.

Flexible
concepts are buildings that are designed in such a way that the demands
corresponds with today's users, but, also above all, with changing needs in the
future quickly and without much effort to adapt.

Integrated
building automation means it is in a position of reasonable intertwining,
monitoring and managing together all of the systems of the house and all of the
security systems with different functions and origins (HERCZEG, 2006).

Networked
information and communications technology means that all information will be
collected and stored centrally through processed data. They are all accessible
on the current status. It gives modern possibilities of communication between
the business groups, but also between the individual employees.

One
can say that a intelligent building is in the position, thanks to its flexible
building concepts, its integrated building automation and its networked
information and communication technology that responds intelligently to
changing needs of its residents (users), the environment and the society
(Economic situation) (ALDA; HIRSCHNER, 2005).

A
building can divided into “simple” and “intelligent”. Simple buildings are
simple structures of mortar and stone. An intelligent building can arise from
them, when the possibility of a building exists to adjust without substantial
intervention and without follow-up costs or adjustment of changing needs. The
prerequisite is that the building and its environment views coherently.
Previously, all parts of problems of a building were processed consecutively or
parallel. Therefore for an intelligent building to arise, it is necessary to
consider integrally all areas. This is done mainly in two main phases (OBERER,
2008):

The
1st phase is the “primary building blocks”:

·Functional analysis (customer needs);

·Intelligent envelope to cover defined functions;

·Shape building technology and building ecology; and

·Efficiency targets for investment and operation.

The
result is an improved structural overall concept. The 2nd phase is the “secondary devices”:

·Building automation and security concept;

·Communications concept for the media,
people, goods and values;

·Intelligent building infrastructure with cabling,
networking and logistics; and

·Building management to the long-term Facility
Management.

The
result of the 2nd phase is an optimized integrated project, called “intelligent
building”.

Finding
these elements of modules and their meaningful combining shows the intelligence
of a building. An intelligent building will be achieved when the in the
planning which needs the users of the building and in the future will have are
analyzed. These will be implemented in the intelligent envelope of the
building, which means, it will be possible, by changing needs also to change
accordingly the design of the building, for example growing at or shrinking,
owner occupancy outside users (SANTAMOURIS, 2006).

From
here on an appropriate structure of the building engineered will be constructed
and the requirements fair flexible housing technology components (heating,
ventilation, electrical equipment, etc.) installed. When this construct
suffices satisfactorily the profitability targets, the best overall
architectural concept has been found.

Besides
this, the technical/electronic communication options (such as wireless
communications, video, image, data), the meaningful choice of cabling the
facilities for the transmission of information (such as fax, computer,
telephone) and a meaningful choice of home automation and security systemshave to be integrated and also planned by the
long-term Facility Management from the beginning, for later an intelligent
building to be built, which becomes a promise of maximum benefit for all
interested parties of the building (HERCZEG, 2006; BOOTY, 2006).

5.2.Intervention of Facility Management

It
is difficult to manage such an intelligent building. This should still result
under the aspects of minimum cost, which is practically impossible without
proper previewed management. Here, Facility Management interferes in the
company. It includes the holistic consideration of a property starting with the
planning over construction, exploitation and maintenance until to the
demolition. In the use phase Facility Management develops his biggest
efficiency. The system is used is Computer Aided Facilities Management - CAFM
(SUN; HOWARD, 2004; NÄVY, 2006). The property portfolio of the company is in
terms of revenue enhancement and cost-cutting managed.

Effective
management of buildings influences the balance of the company in a favorable
direction. Facility Management does not exist in parallel with the company (business)
management, but it intervenes in the business with opportunities to reduce
costs and increase the performance of the company (BOOTY, 2006).

Facility
Management may be understood as a cross-cutting feature of corporate governance
of the company, which is in a separate area of specific responsibility that
receives its tasks through the company and that influences the company through
its solutions.

6.CONCLUSION

Buildings
that save energy, like passive houses or zero-energy buildings, by minimizing
the additional costs and are flexible in their construction need a lot of
technology to realize their functions.

It
was demonstrated that every real estate needs to be seen as its own profit
centre, with a long exploitation life and high costs during this exploitation
time. The best possibility to influence the future additional costs by using
all Facility Management functions is in the planning phase. FM offers
transparency about its property costs and exploitation.

The
properties in the companies as a profit factor were forgotten until some years
ago. New companies and investors want the best use of their assets. And the
property now represents the largest single item in assets, after the production
and administrative areas.

The
investor sees in the property, his invested capital and his recoverable yield.
This means he wants a profit with his real estate. In order to achieve that, it
is necessary to increase the intensity of exploitation, investigate the current
real estate portfolio of the company and its costs.

Changes
in the economical, social and environmental requirements become necessary to
adapt the properties. The solution is called Intelligent Building. Intelligent
Building as combination of Facility Management and Business Management is new,
but in currently necessary to satisfy the needs of the demand. The need of
intelligent building is very current, which conferences like Green Intelligent
Building Conference (2013) shows.

This
type of building needs to be flexible in its structure and services, open for
changes in environmental requirements and sustainable for a value enhancement.
With a CAFM system this is possible and the company will be more flexible in
relation to the competitors and future changes.